Business Process Outsourcing - Relevant to any size of business
Once upon a time Outsourcing was considered to be something that was done by big businesses. These days businesses of all sizes can benefit from the advantages of selecting the right outsourcing partner.
A company must sum up the cost of outsourcing processing against the value that could be added by carrying out revenue generating activities. It is unfair to say financial processing isn’t a value adding activity because using the right outsourcing partner can add all sorts of value to your business (as detailed in the advantages below), but when carried out internally it distracts employees from carrying out real value adding activities.
The concept of outsourcing became popular in the 90’s on a backdrop of increasing labour costs. This should make it a much more viable proposition today with minimum and living wage increases causing labour cost inflation. The initial outsourcing model was designed as a cost cutting exercise but as it developed it became more of a strategic planning tool. It has continued to be used in this way and covers all areas of business, such as financial processing, forecasting, budgeting, project management, payroll, tax, legal and HR amongst others.
Even though the outsourcing model has moved on some businesses have failed to explore the strategic advantages that outsourcing brings. In a relatively short period of time an outsourcing initiative can bring in a wider range of expertise, experience and insight to the business. Effectively it adds capability, scalability and flexibility without the huge HR costs.
Outsourcing doesn’t have to be a big bang approach. It can be done piece by piece. It should be done with a planned and structured approach. If implemented correctly businesses should see many benefits, which I will highlight over my next few blogs in the coming days.